Linan v. Puno

LIÑAN v.
PUNO (1915)
Topic: Contracts of Agency; General Rules of Construction
PARTIES:
 Petitioner: Diego V. Liñan
 Respondent: Marcos P. Puno, et. al
FACTS:
 May 1908 – Linan was the owner of a certain parcel of land.
 May 16, 1908 – Linan executed a document which conferred upon Marcos Puno
(defendant) the power and duties to represent Linan and administer the interest he
possess within the Municipality of Tarlac, to purchase, sell, collect and pay, as well as
sue and be sued before any authority, appear before the courts of justice and
administrative officers in any proceeding or business concerning the good
administration and advancement of Linan’s interests, and may in necessary cases,
appoint attorneys at law or attorneys in fact to represent him.
 June 1911 – Puno, for the sum of P800, sold and delivered said parcel of land to the
other defendants. (Enrique, Vicente, Aquilina and Remedios Maglanok)
 Linan alleges that the said document he executed did not confer upon Puno the
power to sell the land and prayed that the sale be set aside; that the land be
returned to him, together with damages.
 The defendants at first presented a demurrer to the complaint which was overruled.
The order overruling the demurrer the defendants duly excepted. In their answer,
they first denied generally and specifically all of the important facts stated in the
complaint. They admitted the sale of the land by Puno to the other defendants and
alleged that the same was valid.
 The lower court ruled that the document did not give Puno authority to sell the land;
that the sale was illegal and void; that defendants should pay to Linan the sum of
P1K as damages, P400 of which Puno should alone be responsible for.
 The defendants appealed. The defendants insist that Puno had full and complete
power and authority to do what he did.
 The lower court held that the document only gave Puno power and authority to
administer the land; that he was not authorized to sell it
ISSUES/HELD:
 W/N the court erred in holding that Puno was not authorized to sell the land in
question.
o YES.
o Contracts of agency, as well as general powers of attorney must be
interpreted in accordance with the language used by the parties.
o The real intention of the parties is primarily to be determined from the
language used. The intention is to be gathered from the whole instrument.
o In case of doubt resort must be had to the situation, surroundings and
relations of the parties. Whenever it is possible, effect is to be given to every
word and clause used by the parties.
o It is to be presumed that the parties said what they intended to say and that
they used each word or clause with some purpose and that purpose is, if
possible, to be ascertained and enforced. The intention of the parties must
be sustained rather than defeated.
o If the contract be open to two constructions, one of which would uphold
while the other would overthrow it, the former is to be chosen.
o So, if by one construction the contract would be illegal, and by another
equally permissible construction it would be lawful, the latter must be
adopted.
o The acts of the parties in carrying out the contract will be presumed to be
done in good faith. The acts of the parties will be presumed to have been
done in conformity with and not contrary to the intent of the contract. The
meaning of general words must be construed with reference to the specific
object to be accomplished and limited by the recitals made in reference to
such object.
o In this case, the words “administer, purchase, sell” seem to be used
coordinately. Each has equal force with the other. There seems to be no good
reason for saying that Puno had authority to administer and not to sell when
“to sell” was as advantageous to Linan in the administration of his affairs as
“to administer.”
o To hold that the power was “to administer” only when the power “to sell”
was equally conferred would be to give effect to a portion of the contract
only. That would give to special words of the contract a special and limited
meaning to the exclusion of other general words of equal import.
o The record contains no allegation or proof that Puno acted in bad faith or
fraudulently in selling the land. It will be presumed that he acted in good faith
and in accordance with his power as he understood it.
o The contract, liberally construed, justifies the interpretation given it by Puno.
In reaching this conclusion, it must be taken into account the fact that Linan
delayed his action to annul said sale from the month of June 1911 until the
15 of February 1913. Neither has the Court overlooked the fact charged in
the brief of appellants that Linan has not returned, nor offered to return, nor
indicated a willingness to return, the purchase price.
DOCTRINE:
 Where a principal has acquiesced in the acts of his agent for a long period of time,
and has received and appropriated to his own use the benefits resulting from the
acts of his agent, courts should be slow in declaring the acts of the agent null and
void.
JUDGMENT: Petition is DENIED.

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LIÑAN v.

JUDGMENT: Petition is DENIED.

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